ANZ to maintain forecast on Vietnam growth

February 11, 2014 | 10:05

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With Vietnam’s January indicators maintained steady improvement, ANZ research department keeps Vietnam GDP growth forecast of 5.6 per cent this year.

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According to ANZ’s updated report on Vietnam released early this week, those improvements include continued moderation in inflation, narrow trade balance, steady growth in retail sales, stable currency and rallying stock market.

Not only ANZ, on January 23, Fitch also acknowledged the gradual improvement in Vietnam’s macroeconomic fundamentals. This international rating agency expects Vietnam GDP to expand 5.7 per cent and 5.9 per cent in 2014 and 2015 respectively.

Therefore, ANZ maintains its forecast of 5.6 per cent and 5.8 per cent growth rates over the same period.

ANZ report also highlighted the slow rise in price for the first month of this year. January inflation moderated more than expected to 5.45 per cent year on year. On a sequential basis, consumer prices rose 0.69 per cent month on month, the slowest monthly gain in January since 2010.

“The modest rise in prices is still indicative of soft demand. We hold on to our 2014 inflation outlook rising to the 7.5-8.0 per cent range when the government pursues a more expansionary policy. Plans to ramp up its public infrastructure programme in 2014 will likely push up domestic demand,” stated the report.

Besides that, there are other positive economic figures. According to ANZ, domestic activity continues to gain traction. Despite the expected distortions due to the celebrations of the Tet holidays or the Lunar New Year, January’s economic indicators show stable, if not improving, domestic demand. Retail sales rose 11.9 per cent year on year, from 8.5 per cent over the same period in 2013. The growth in services and tourism related sales surged 22.9 per cent y/y, partially offsetting the moderation in growth of trade-related sales

By By Trinh Trang

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